8 minute read
2020 Brings New
2020 Brings New Workplace Requirements
By Mark S. Spring
Every year, United States employers must address new state and federal laws governing the workplace. Very few changes have taken place at the federal level over the last several years, as it has been rare that the President and Congress can agree when it comes to federal employment law legislation. This pattern continued in 2019, and we saw very little significant legislative developments in the employment law arena.
However, several states, led by California, have enacted significant employment laws in 2019. These new statutes will likely require employers to make significant changes to their practices and/or policies to ensure compliance. The most important changes affecting the American workplace in 2020 are summarized below.
Increase in Federal Salary Test: For the first time in almost two decades, the federal salary test for exempt professional, executive and administrative workers was raised. The minimum salary to qualify for these exemptions was increased from $455 to $684 a week. This change makes all professional, executive and administrative employees who earn less than $35,568 annually — over one million workers nationally — eligible for overtime pay under the Fair Labor Standards Act.
Standards Act: Several states have higher salary minimums to qualify for overtime exemption under applicable state law. Many other states are also increasing their minimums. For example, in 2019, Pennsylvania enacted a new law that gradually increases the salary test from $35,568 in 2020 to $45,500 in 2022, with automatic increases beyond 2023 based on an index. California pegs its salary test at two times the minimum wage. Each time the state minimum wage increases, so does the salary test. For 2020, California’s minimum salary for exempt qualification is $54,080.
Independent Contractor Qualification in California: Codifying a recent California Supreme Court decision, the California Legislature enacted AB 5 in 2019. By adopting the restrictive ABC test for independent contractor qualification aimed at gig workers, this bill makes it much more difficult to label workers as independent contractors in the Golden State. In fact, unless the worker qualifies for one of the exemptions provided by AB 5, by law any worker who performs work that is part of the ordinary business of the hiring entity must be classified as an employee. I
It’s imperative for California employers to review their independent contractor agreements under AB 5 to ensure that the workers continue to qualify as contractors. Misclassification of workers as independent contractors in California comes with steep penalties, including significant wage and hour exposure and, if found to be done intentionally, a requirement that companies disclose the misclassification on their website.
Pre-Employment Drug Screening in Nevada: With Assembly Bill 132, Nevada became the first state to prohibit preemployment drug screening for marijuana. There are exceptions to the new law that allow pre-employment marijuana screening for firefighters, employees who operate vehicles and other employees where banning such screening could cause safety issues.
Laws restricting drug testing for marijuana are likely to be considered in the next year or two by many other states where marijuana has been legalized. In fact, New York City already passed such an ordinance in 2019. Its ban will go into effect for city employers in May. The law prohibits employers from using pre-employment marijuana screening as a condition for employment.
Banning Mandatory Arbitration in California: In the fall of 2019, California passed AB 51, which outlawed new mandatory arbitration agreements requiring binding arbitration of many employment-related claims in California, effective January 1, 2020. This law was patterned after a similar, but narrower, 2018 law enacted in New York that bans mandatory arbitration of sexual harassment claims.
However, in January, the Federal District Court for the Eastern District of California in Sacramento issued an injunction prohibiting the enforcement of AB 51 on the grounds that it conflicts with, and is preempted by, applicable federal laws promoting arbitration. It remains to be seen what the courts will ultimately do with this bill.
Salary History Ban in New Jersey/ New York: Effective January 1, 2020, New Jersey joined a plethora of other states when it enacted Assembly Bill 1094, banning private employers from inquiring about a job applicant’s salary history, benefits and other compensation during the hiring process. The New York law is even broader. It prohibits all employers, both public and private, from asking prospective or current employees about their salary history and compensation. It also prohibits businesses from seeking similar information from other sources.
Within the last two years, more than 10 states and a number of municipalities have passed similar laws. Expect this trend to continue as the movement to eliminate the gender pay gap continues to gain momentum.
Lactation Accommodation in California: California enacted broad legislation increasing the burdens on California employers to accommodate employees who are lactating. In addition, the state now requires employers to publish written policies addressing lactation accommodation.
Settlement Agreements in California/ Oregon: Oregon’s Workplace Protection Act, which becomes effective October 1, 2020, of this year, prohibits employers from entering into settlement agreements or any agreements that contain a nondisclosure provision, non-disparagement provision or any other provision that has the “purpose or effect of preventing the employee from disclosing or discussing conduct” related to discrimination and harassment on the basis of any protected category under Oregon law. There is an exception to this prohibition. In cases where it is the employee’s (or applicant’s) preference to have such provisions, and the individual is provided at least seven days to revoke the agreement after signing, these provisions are still permitted.
California enacted an outright, very broad ban on no rehire clauses in settlement agreements. The new California prohibition, which took effect in January of this year, provides that any agreement to settle an employment dispute may not contain a provision that prohibits, prevents or otherwise restricts a settling party that is an aggrieved person, as defined, from working for the employer against which the aggrieved person has filed a claim, or any parent company, subsidiary, division, affiliate or contractor of the employer.
Sexual Harassment Training in Illinois/Connecticut: Illinois passed new laws requiring employers to implement sexual harassment training and to complete certain training of both supervisory and non-supervisory employees by December 31, 2020. The Illinois Department of Human Rights is developing a model sexual harassment prevention training program for use by employers.
Connecticut also recently expanded employer obligations relating to sexual harassment training and notice requirements. Connecticut employers with three or more employees are now required to provide sexual harassment training to all employees by October 1, 2020. Previously, the law only required employers to provide such training to supervisory employees. Sexual harassment training requirements differ widely by state/jurisdiction. The laws are constantly changing in this area. For example, new training requirements in California were scheduled to become effective in 2020, but the state delayed the implementation of these training requirements until 2021.
Multi-state employers are advised to attempt to keep up with the laws in this area to adequately ensure that their employees and supervisors received the mandated training required in the jurisdiction in which they are employed.
Paid Family Leave in Multiple States: Paid leave is on the rise with more and more leave rights emerging. In 2019, Washington State passed legislation that provides eligible employees with 18 weeks of paid family leave annually, effective January 1, 2020. Washington, D.C. passed legislation that provides eligible employees with up to eight weeks of annual paid family leave depending on the reason: to care for one’s own health condition, two weeks; to care for the serious medical condition of a family member, six weeks; or to bond with a new child, eight weeks. The D.C. law becomes effective July 1, 2020.
California lengthened its paid leave period from six to eight weeks. Effective January 1, 2020, Nevada requires private employers with 50 or more employees in the state to provide certain employees working in the state with up to 40 hours of paid leave per year to be used for any purpose, including non-medical, personal reasons.
In 2019, Maine became the first state to pass legislation requiring employers to provide paid leave for any reason. The law, called the Act Authorizing Earned Employee Leave, will go into effect on January 1, 2021. It is mandatory for all employers with more than 10 employees and provides that employees working for such employers must be provided with up to 40 hours of paid personal leave per calendar year. Under the Act, employees will accrue one hour of paid leave for every 40 hours worked.
In addition to the legislation by the two Washingtons, Maine, Nevada and California, the federal government has enacted legislation providing for paid family leave for federal employees. Ivanka Trump continues to push for the expansion of this bill beyond federal employees. Look for more states to enact paid family leave legislation and continued pressure for such legislation at the federal level.
Equal Pay for Equal Work in Colorado: Colorado enacted broad equal pay legislation last year. The provisions of this bill will not take effect until January 1, 2021; but it is important for Colorado employers to begin looking at this sweeping legislation during this calendar year to ensure compliance and minimize risks.
Organ Donation Leave in California/ Oregon: California expanded its existing leave laws for organ and bone marrow donation and doubled the amount of available leave from 30 business days to 60 business days (half of it paid). Oregon enacted legislation for the first time that requires employers to provide paid leave for organ donors.
In the United States, most employment regulation traditionally occurs at the state level. In addition, in the last decade we have seen more and more employment laws/requirements being enacted at the city/municipal level. This makes it very challenging for multilocation employers to try to remain in full compliance with all applicable laws and ordinances. It is very important to keep up with the changes and take the necessary steps to ensure that your policies and practices are consistent with the applicable law and are being kept up to date.
Mark S. Spring is the Managing Partner of Carothers DiSante & Freudenberger LLP’s Sacramento office, and Chair of the firm’s Traditional Labor Law Practice Group. mspring@cdflaborlaw.com
